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Ross Martin

Insurance Writer

  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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Kristine Lee

Insurance Analyst

  • Licensed Insurance Agent — Property and Casualty
  • 4+ years of Experience in the Insurance Industry

Kristine is a licensed insurance agent who joined The Zebra in 2019 as an in-house content researcher and writer. Before joining The Zebra, she was a…

Ordinance or law coverage

Sometimes referred to as “law and ordinance coverage,” this additional endorsement to your homeowners insurance policies protects you in case local law or building codes require updates to your property. Though it is commonly a part of commercial property coverage, it is also an important part of homeowners insurance.

Read on to find out more about how this coverage can help bring your home up to code after a covered loss.


Ordinance or law coverage — table of contents:

  1. What is law and ordinance coverage?
  2. How does ordinance or law coverage work? 
  3. How much does ordinance or law coverage cost?
  4. Do I need ordinance or law coverage?



What is law and ordinance coverage?

Ordinance or law insurance coverage pays for the additional costs associated with upgrading your primary dwelling or other structures to comply with local building codes or ordinances. Usually, these building upgrades must be implemented after a partial or total loss to your property caused by a covered peril. This is especially true if you own an older home. Standard homeowners policies don’t often cover such upgrades. As such, without this added coverage, you would be on the line for the extra costs associated with bringing your home up to code. 


What kinds of code changes does ordinance or law insurance cover?

Building code changes usually have to do with construction practices and the materials in building your home. Plumbing and the electrical wiring systems commonly require upgrades. States and municipalities update building regulations for a number of reasons, be it for safety or environmental purposes. If you live in a state prone to earthquakes, windstorms or hurricanes, your area may adopt building practices to ensure homes are better able to withstand such events.

As long as your homeowners insurance company considers damages to be a covered loss, the increase in cost to help you comply with local ordinances will be covered by ordinance or law coverage.



How does ordinance or law coverage work?

This added insurance coverage covers the cost of getting your home in alignment with current building codes. Before rebuilding or repairing your home after a covered loss, your city or state may require upgrades. These upgrades can cost significantly more than the limit for your replacement cost listed on your homeowners policy.

Ordinance or law coverage steps in to help pay for these upgrades through the following means:

  • A loss to the undamaged portion of the building: Sometimes local building codes require that an entire structure be demolished and rebuilt if a certain percentage is seriously damaged. This part of the policy pays for the loss of value from this portion of the home. 
  • The increased cost of construction: This portion of the coverage helps to account for an increase in construction costs due to the added work necessary to bring your home up to code.
  • Demolition costs: Covers the tear-down costs as well as those associated with the removal of debris. 



How much does ordinance or law coverage cost?

The cost of ordinance or law coverage is relatively reasonable, averaging $66 extra per year for $40,000 worth of coverage. Keep in mind, however, that these rates can vary depending on where you live. Below is a breakdown of the average yearly cost by homeowners insurance carrier for a variety of coverage levels.


Insurance Provider Average Premium (No coverage) $10,000 Limit $20,000 Limit $30,000 Limit $40,000 Limit
Allstate $1,339 $1,389 $1,400 $1,412 $1,413
Farmers $1,706 $1,720 $1,720 $1,777 $1,777
Liberty Mutual $1,357 $1,364 $1,364 $1,492 $1,492
Nationwide $1,261 $1,276 $1,276 $1,330 $1,330
State Farm $1,302 $1,302 $1,302 $1,340 $1,340
Travelers $1,361 $1,418 $1,418 $1,419 $1,424
USAA $1,286 $1,286 $1,286 $1,288 $1,288



Do I need ordinance or law coverage? 

Like all types of insurance, ordinance or law coverage can be incredibly helpful in situations that you don’t see coming. If you own an older home, this coverage add-on can be a wise choice, as code upgrades can be costly. Consult your insurance company to see if this coverage is available and if it could be a good option for you.

However, if you are worried about the potential costs law and ordinance coverage could add to your homeowners policy, you may want to consider shopping around. The Zebra allows you to compare homeowners quotes side by side to find an insurance policy to suit your needs.


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About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.